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Ulker Bisküvi reported a 4.8% increase in revenue for the third quarter of 2025, reaching 25.4 million Turkish lira. The company also saw a 13% rise in gross profit and a 16.5% growth in EBITDA. Despite a challenging macroeconomic environment, Ulker maintained its market position and continued its focus on innovation and sustainability. The company’s stock remained stable post-announcement, reflecting steady investor sentiment.
Key Takeaways
- Q3 2025 revenue grew by 4.8% year-over-year.
- Gross margin improved from 27.1% to 29.2%.
- Significant growth in export operations with a 19% revenue increase.
- Continued focus on innovation and sustainability initiatives.
- Stable stock performance post-earnings announcement.
Company Performance
Ulker Bisküvi demonstrated resilience in Q3 2025, with revenue increasing by 4.8% to 25.4 million lira. The company’s strong performance was bolstered by a 13% rise in gross profit and a 16.5% growth in EBITDA. Despite a contracting snacking market in Turkey, Ulker managed to expand its market share and maintain robust financial health.
Financial Highlights
- Revenue: 25.4 million lira (4.8% increase YoY)
- Gross Profit: 7.4 million lira (13% increase YoY)
- Gross Margin: Expanded to 29.2%
- EBITDA: 4.5 million lira (16.5% growth YoY)
- Net Income: 1.1 million lira
Outlook & Guidance
Ulker Bisküvi is optimistic about its future performance, projecting a net sales growth of 3% (±1%) for 2025 and an EBITDA margin of 17.5% (±0.5%). The company plans to continue investing in innovation and sustainability, with expectations for Q4 to outperform Q3.
Executive Commentary
CFO Fulya Banu Sürücü emphasized the company’s adaptability in a volatile macroeconomic environment, stating, "We operate in a dynamic, volatile macroeconomic environment." She also highlighted the company’s strong innovation pipeline and consumer engagement, expressing confidence in meeting guidance despite challenges.
Risks and Challenges
- High inflation rate in Turkey at 33.3% could impact consumer spending.
- Volatility in cocoa prices may affect cost structures.
- A contracting snacking market in Turkey presents growth challenges.
- Currency fluctuations could impact international revenues.
- Geopolitical tensions in key markets may affect operations.
Q&A
During the earnings call, analysts inquired about the impact of cocoa price volatility and the company’s hedging strategies. Ulker’s management reassured investors of a stable hedging policy, with 60% of open balance sheet positions hedged. Additionally, the company successfully refinanced its debt, securing new syndication loans to support future growth initiatives.
Full transcript - Ulker Biskuvi-EXCH (ULKER) Q3 2025:
Moderator, Ulker Bisküvi: Hello everyone, welcome to Ulker Bisküvi’s third quarter 2025 earnings call. Thank you for joining us today and for your continuous interest in our company. We appreciate your time as we review another solid quarter of performance, highlighting our continued focus on sustainable growth, operational efficiency, and delivering value to our consumers and shareholders. With that, I will now hand it over to our CFO, Fulya Banu Sürücü, who will walk you through the operational and financial results in detail. Fulya Hanım, please.
Fulya Banu Sürücü, CFO, Ulker Bisküvi: Beste, thank you. Good morning, good afternoon everyone. Thank you for joining us today for Ulker Bisküvi’s third quarter 2025. Due to a last-minute change of plans, our CEO had to travel and could not attend this meeting. He apologizes for that and says hi to everyone. Today I will walk you through our operational performance, performance highlights, and provide a deeper dive into our financials and segment performance, discuss our balance sheet, strategic initiatives, and conclude with our outlook. After the presentation, I will be happy to take your questions. To begin, Ulker continues to deliver strong results driven by our diverse product portfolio, correct strategies, and commitment to innovation. Let’s begin with a snapshot of the macroeconomic landscape in Turkey as we enter the last quarter of 2025.
Despite ongoing global uncertainties, the country’s GDP growth rate is projected to stabilize at 2.7% for this year, and it is expected to land at 3.7% for 2026 per IMF, higher than the world’s GDP growth of 2.8%. Turkey’s CDS spreads have shown improvement, reflecting increased investor confidence and a more stable outlook compared to previous years. Inflation remains as a challenging topic, even though there is a significant variation when we break this down by main items. As of September 2025, total inflation stands at 33.3% year over year. Consumer confidence index has shown gradual improvement over the past year, causing a positive shift in consumer outlook. In summary, we operate in a dynamic, volatile macroeconomic environment. GDP growth remains resilient. We see an improvement in consumer confidence, but we are mindful of inflationary pressures and probable shifts in consumer confidence and behavior.
Today’s key messages is mainly six—there are six key messages I’d like to share with you: agility, staying responsive, and aimed volatility; championing, value, and accessibility, ensuring our products remain affordable and widely available; driving consistent growth momentum through innovation and execution; leveraging AI-driven performance and operational excellence; delivering impactful new product development and consumer-centric campaigns; maintaining operational excellence and rigorous cost management to safeguard our margins. In summary, this is how we will continue to deliver value to our investors, our customers, and all our stakeholders towards the end of the year and continuing in 2026 as well. On the next page, we will talk about new product launches and their contributions. Let’s start with third quarter first. During the first three quarters of the year, we successfully introduced a series of new products, each closely aligned with evolving consumer needs.
These launches delivered a meaningful contribution, accounting for 4% of our snacking revenue in the third quarter. Our innovation pipeline remains robust, with strong consumer engagement. When we take a look at how the picture changes or how the picture looks as of nine months revenue contribution, for the first nine months, new product launches accounted for 13% of domestic and 6% of international snacking revenue, totaling 11%. This demonstrates our ability to drive growth through innovation. We continue to innovate both domestically and internationally, ensuring our portfolio meets evolving consumer preferences. Our sustainability strategy remains at the core of our strategy and our vision. We advanced our Beyond Hazelnut and Regenerative Agriculture programs. We published our 10th sustainability report, and we won the Sustainable Business Award for carbon management and net zero. Our social responsibility initiatives, like the mobile health service, continue to make a positive impact.
When we take a look at the highlights in terms of corporate communications, we have continued to strengthen our corporate reputation through community engagement, sustainability, and brand storytelling. We are proud to be the main sponsor of the European Para Youth Games in Istanbul, supporting young athletes and inclusivity. With inspiring stories, we reached millions via digital and press channels, competing with hearts video series. Our communication efforts have amplified our achievements. We have been awarded in various platforms for excellence in business, HR, digital transformation, safety, sustainability, and quality. Our people are our greatest asset. We are proud to be recognized as Turkey’s happiest workplace for the fourth year in a row.
We have invested in AI training, R&D development, and well-being initiatives, earning 21 awards, including 11 gold at the International Business Awards, which is one of the most prestigious award programs in the business world. All these achievements reflected our ongoing investment in people, innovation, and operational excellence, positioning us for sustainable growth and continued success. Let me continue with our operational performance. Ulker’s geographic footprint continues to be a key driver for our resilience and long-term growth. Let me start with our home market, Turkey. Despite the challenging macroeconomic environment, which I have shared at the beginning of the presentation with all of you, we delivered 4.9% revenue growth and a solid 7.9% EBITDA growth, which is adjusted for inflation accounting numbers. This performance reflects our discipline, polished pricing, strong brand equity, and operational agility.
Export operations delivered 19% revenue growth, supported by strong demand in key markets and improved market execution. EBITDA decline of 8%, primarily due to ongoing inflationary pressures and the depreciation of Turkish lira, that impacted cost base and profitability. We remain confident that our export strategy is on the right track, and we continue to prioritize sustainable growth and brand strengthening in our international markets. In the Middle East, you see a 5.9% revenue growth, and in North Africa, we delivered 29.5% revenue growth, supported by strong momentum and pricing. EBITDA was slightly down by 0.7%, but we view this as a short-term margin normalization. Finally, in Central Asia, we achieved 11.5% revenue growth.
Even though there was a decline in EBITDA, this was impacted by currency devaluation, input cost inflation, and our overall geographic diversity continues to be a strategic advantage, helping us balance risk and capture growth across multiple markets. Turning to our revenue mix, Ulker’s scale and nature are clearly reflected in our top-line performance. As of the first nine months of 2025, we generated TRY 80.9 billion in net revenue, with 71% coming from our domestic operations and 29% from international markets. You also see on the same page that, I mean, the breakdown of the export international markets by export, Central Asia, North Africa, and Middle East as well. When we take a look at our market share, Ulker continues to hold the leading market shares in key categories across our core regions.
In Turkey, we remain the undisputed leader in biscuits, chocolate, and cakes with 34% market share. In the Middle East, our strong presence in biscuit category continues with 27% market share. In North Africa, we are gaining ground, especially in biscuits, where our market share has reached 14%. In Central Asia, we are also an important player in chocolate with 14% market share. Ulker maintains, in summary, leading market shares in biscuits, chocolate, and cake in all the regions we operate. Let me continue with the financial performance, how we delivered financially in Q3. In Q3 2025, we accelerated growth with balanced top-line and margin improvement. Revenue, gross profit, EBITDA, and net income all increased year on year, reflecting our effective strategies and operational discipline.
When we take a look on a deeper perspective on each bucket for Q3, volume increased by 0.7% from 172 tons in Q3 2024 to 174 tons in Q3 2025. Total revenue up 4.8%, reaching TRY 25.4 million compared to TRY 24.2 million last year. The gain came again from our disciplined pricing, promotions, and improved mix. Gross profit rose 13% to TRY 7.4 million from TRY 6.6 million in Q3 2024. Gross margin expanded from 27.1% to 29.2%, a 2.1 percentage point improvement driven by lower cost pressure and better product portfolio mix. EBITDA grew 16.5%, delivering TRY 4.5 million, up from TRY 3.9 million a year ago. Net income reached TRY 1.1 million, demonstrating the strong pass-through from margin improvement to bottom-line earnings.
In this quarter, we are not just defending our margins in a challenging environment, but we are also growing them with revenue and profit both advancing versus prior year. On a nine-month perspective, for the first nine months, we balanced growth and headwinds. While some metrics faced pressure, our net EBITDA remained at a healthy level, and we continue to focus on sustainable profitability. For the first nine months, total volume declined by 1.5%, revenue increased by 4.6%, reaching TRY 80.9 million. Gross profit slightly increased to 30.2%, reaching TRY 24.4 million, and EBITDA remained at 17.8%, again with inflation accounting adjusted, which is quite a healthy number, and we delivered 5.7% net income of TRY 4.6 million.
Net EBITDA, this is just a calculation from the face of the balance sheet, TRY 1.76 million, and over the coming slides, I will be sharing with you the net EBITDA from covenant calculation perspective, which is quite a low number and which is a very healthy number. When we take a look at the breakdown, domestic versus international. Our financial performance is strong across both domestic and international markets with notable improvements in EBITDA and gross profit. We continue to optimize our regional mix for profitability. Our domestic operations total revenue decreased by 3%, reaching TRY 17.1 million in Q3 2025. Gross profit increased by 10.2%, reaching 28.5% gross profit margin, delivering TRY 4.9 million gross profit, and EBITDA margin on the domestic side is approximately 19.7%, close to 20%, reaching TRY 3.37 million.
Total snacks market in Turkey contracted approximately by 2.1% year over year compared to Q2 2025, and in line with this market contraction, our domestic volume also in Turkey declined accordingly, reflecting the broader industry trend. However, this was offset by strong 9.6% volume growth in export and international operations, which contributed positively to our overall volume. In terms of international business, total revenue is up 26.1%, reaching TRY 8.32 million in total revenue, and we were able to deliver approximately 31% gross profit margin in international business and delivering an EBITDA margin of 13.7%. The breakdown, where domestic and international shows two distinct dynamics: domestically improving margins despite lower revenue, demonstrating strong pricing power and cost discipline. Internationally, robust top-line growth, but some margin compression due to effects and cost factors. Both regions contributing positively to consolidated EBITDA growth.
Let me continue on the consolidated volume and revenue contribution by category. Overall, total snacking revenue grew by 5.1%, supported by innovation and effective marketing. On this slide, we move from regional to category-level performance. Snacking sales volume grew 1.3%, reaching 253 tons in Q3 2025. Snacking sales value increased by 5.1% from TRY 23 million to TRY 24.2 million. This value growth shows the positive mix and impacts more premium-scale successful innovation launches and price discipline across all our core categories. Category mix, biscuits rose from 57% in Q3 to 59% in Q3 2025. Chocolate declined slightly from 33% to 31%, reflecting competitive pricing and portfolio adjustments, and cake steady at 10%, continuing to provide category diversification. Overall, snacking portfolio’s revenue increase was supported by targeted product launches, optimized volume mix, and integrated marketing campaigns, both digital and in-store, aimed at strengthening brand equity and consumer pool.
This strategy’s focus allowed us to build value even on modest volume gains. On balance sheet finance, again, we closed the quarter with a very strong balance sheet. Our balance sheet remained robust. We have closed with 63% of our net position hedged, secured a new syndication with our commercial banks and EBRD, and our covenant-based net EBITDA is at 1.11 as of September 2025. I’m sure you have seen from the news that our syndication loan is finalized with the commercial banks reaching to $250 million, five-year bullet syndication loan, the first in the Turkish private sector since 2020, with very prestigious led by JP Morgan and with very highly prestigious international banks with 11 banks. We were able to complete the first five-year bullet syndication since 2022 in Turkish private sector.
Very recently, we have also closed EUR 75 million with EBRD with the same conditions, again a five-year bullet with the same conditions that is on syndication. With all these new updates, our long-term loan is around 31%, short-term is 69%, and this will, over the coming months, change to long-term when we finalize. I mean, it’s already finalized in October, but as of Q4, most of the loan will go to the long-term bucket on this table. In terms of net EBITDA, it’s 1.11. You see our high focus on net EBITDA. In terms of working capital, yes, there is a slight increase versus prior year, but it’s mainly driven by seasonality, and we may go into detail if you have additional questions in terms of working capital.
For outlook, we shared with you that a net sales growth of 3% and EBITDA margin of 17.5%, but with this volatile environment and uncertainties, we shared with you a range for net sales with plus and minus 1%, EBITDA margin with plus and minus 0.5%. As of Q3, we also keep the same outlook for 2025, and we believe that we will be able to meet the target that we have shared with you. This five-h growth model, our CEO shared this with you. Again, most of our strategies is based on this five-h growth model that we have stated beginning of the year, which we are also very keen and very proud about. That is all I’d like to share with you in terms of our Q3 performance.
So we believe that our Q3 performance is quite strong, and I’m happy to take any questions you have for me. Thank you very much. We’ll now move to the Q&A part of the call. In the meantime, we’re opening a quick survey for our web participants. Your feedback is highly valued and greatly appreciated. The survey will remain open during the Q&A. If you’d like to ask a question, please press Star 2 from your phone. That is Star 2. If you’re connected from the web, you can send a voice or text question. We’ll give it a few moments for the questions to come in. Okay. Our first question is from Eden Ercius from Yapikredi. Your line is now open. Please go ahead. Thank you. Thank you for the presentation and congratulations for the good results. My question is regarding your 2025 guidance.
Your guidance implies a 2% revenue decline and around 1.0% year-over-year EBITDA margin contraction in the fourth quarter of 2025. Could you please elaborate on the main reasons behind maintaining this guidance despite the strong this quarter performance and higher trailing growth? How do you see the fourth quarter 2025 and October trends and also 2026? Thank you. Thank you for the call, for your question. There is a base impact in Q4 2024. Our fourth quarter in 2024 was very, very strong, extremely strong, especially with some new innovations. If you might remember Dubai Chocolate, we were first in the market from a commercial perspective, first company in the market with a branded Ülker brand in the market, which really had huge sales, much better sales, and much more sales than we had anticipated, which contributed significantly to our Q4 numbers.
Q4 2024 was very, very strong. There is a base impact. If I tell you that there might be a slight decrease versus 2024, these are the reasons. Again, we believe that Q4 will be a strong Q4 as well. October went overall well. We do not expect, hopefully, any huge surprises unless something very unexpected comes up globally or regionally. We believe that we will be able to meet our guidance. I think not changing the guidance and meeting this guidance in such a volatile environment is also another success, I believe. Thank you. I have one more follow-up question according to your EBITDA margin, if it’s okay for you. Of course. Sure. Please go ahead.
When we look at your third quarter domestic EBITDA margin improvement, seems partly linked to product mix, it could be attributable to higher chocolate unit prices during two periods. Could you confirm whether this was the main driver or if there was also a positive contribution from raw material costs or pricing efficiencies? Thank you. Overall, I can tell you without going into too much detail, yes. You have the right idea. Yeah. Okay. Thank you. Thank you so much. Thank you. Thank you very much. Our next question is from Alasdair Alexander from Santa Rosa Investment Management. You mentioned seasonality on the inventory levels. Where do you expect inventory to be by end of the year and going into next year? The increase in, so there is another also seasonality impact in 2024. By the end of 2024, we ended up with very low inventory levels.
When we started this year in 2025, there was an increase in inventory related to the higher scope of shipments in half one, which impacted our inventory numbers. The increase in inventory data is a direct result of a plant rebalancing and a significant shift in the timing of our procurement compared to last year. When we had this, the relevant impact will also neutralize, we believe, by year-end. We had very low inventory levels in 2024, and we believe that a deliberate plant front-loading of our cocoa procurement in the first half of 2025, which also is still impacting us, will be normalized by year-end. Thank you. Our next question is from Ali Kenim from Gedic Investment. Your line is now open. Please go ahead. Yes. Hello. My question is more on 2026.
You bought some raw materials during the first half of the year, and since then, cocoa dropped by 30%. First question is how you avoid inventory losses on this. The second question is, if the trend continues like this, how do you think that will impact your financial performance in 2026? Thank you for your question. Yeah. Cocoa dropped very unexpectedly in the last couple of months or maybe in the last couple of weeks. Then again, it increased, and it kind of went down again. As of today, we do not know how it’s going to be towards the end of the year. It keeps changing. It went up to $4,800, so we definitely monitor it very closely. Now it’s around $4,400. We keep definitely monitoring it.
What we are, yeah, to close out of our procurement in the first half of the year, which impacted us, I mean, positively, especially in the first half of the year and then the last year as well. We have a hedge policy that we shared before, but again, we do not disclose any numbers, how much we are close or not. It is not a number that is disclosed. I believe that, I mean, first, we do not know how things will change. Second, based on that, I think we will be able to navigate through this challenge. A significant portion of our cocoa needs for the remainder of 2025 is secured. It is also for into 2026 has also been secured at size to determine by our half one numbers. Again, as of today, we do not disclose any exact number.
I believe that with these volatilities and uncertainties, we should be able to navigate it. As of today, it is early to say anything. I believe also that the benefit of the recent drop in spot prices will have a lagged effect. We’ll see. Okay. Thank you. Thank you. Our next question is from Mehmet Yigit from Unlu & Co. Thank you for the presentation and congrats for the results. How do you see the Turkey total snacking market so far in the fourth quarter 2025? What is the reason for higher inventory and working capital in 2025 compared to 2024? In terms of the total snacking market, the market contracted by 2.1%, including all snacking markets. For the first nine months, it decreases by 1.8%. On a Q3, Q2, Q4 basis, it decreased by 2.1%.
There is a shrinkage in the market that impacts, I mean, all the companies and consumers. That is how we see it. I mean, in Q4, there might be a slight sequential improvement over Q3 driven by a typical year-end seasonality and holiday demand. I expect Q4 to be slightly better than Q3. Q3 and the first nine months of this year, there was a shrinkage and contraction in the market, which impacted all of us. The fourth quarter is expected to be better. Regarding your second question of inventory, I think I kind of answered it in the prior question, but overall, let me summarize that in the first half of the year, we had an increase in inventories of the higher cocoa shipments that we had in half one.
With this higher inventory shipments in half one, it kind of continued in Q2 and Q3. That impacted Q3 as well. That impacted our inventory levels. We expected to normalize towards the end of the year. I think overall, that’s the main reason. Thank you very much. Our next question is from Jamal Demirtaş from Ata Yaterim. Your line is now open. Please go ahead. Thank you for the presentation and congratulations for the results. My first question is about the cocoa sides. You mentioned about it that you secured, but could you tell us a little bit about the hedging mechanism there? Related to the margin recovery, we see the second quarter margin was very much negative surprise, and we see a positive surprise in the third quarter.
Considering the cocoa price or other raw material prices, should we expect the margins to stabilize around 17-18% in the following quarters, maybe also in 2026? Is it a fair assumption? And related to working capital, should we see also some normalization in the following year? Because as my colleagues mentioned, your working capital needs increased compared to last year. What should be the picture for 2026? Related to demand side, you said better quarter in fourth quarter so far. Is it on the domestic or both in domestic and international side? Thank you. Okay. Let me start with your last question. The demand side is both international and domestic. That is the expectation. In terms of working capital, yes, we expect 2026 to normalize. In fact, I expected that you will be able to see it through Q4 as well.
Regarding what was the first? The first question is, yeah, related to cocoa hedge and margin. So related to margin, Jamal, we think that we will be able to meet our guidance. From that guidance, you can also, I mean, calculate the expected Q4 margin. We believe that you should be able to meet that target, to meet that margin number, and we will be able to meet our full year guidance as promised before. Regarding cocoa hedge, yes, definitely, there is a hedge policy in the company that goes throughout the year. As of today, we do not disclose how much is hedged or unhedged. As you know, the cocoa number is very volatile. It decreased to $4,000, and it increased to $4,800. It is $4,400.
We still do not know what is going to happen in November, by the end of November, December, and January. We’ll see. I mean, we are confident. We are acting per our policy, as stated our policy. Depending on the changes, the benefits of the recent drop in spot prices will have a lagged effect. We do not expect to see a material positive impact on our cost of goods sold until further into 2026 of discounts. Thank you. As a follow-up, related to your open position and your hedging, do you have any specific target for that, just like the cost of your debts? When I look at your FX and the interest expense, in TL terms, I calculate around 27% in TL terms, if I’m not wrong.
In the following quarter, because when we look at your open position, when the TL depreciation narrows, you should have lower financial expenses. As you are protecting your position through hedging, you have a stable FX or the interest expense and plus FX position. Should we expect that to continue or could you make any rebalancing in your hedging positions depending on the conditions? Thank you. Our hedging position will not change. We set a policy that states very clearly that minimum 60% of the open balance sheet position needs to be hedged. We will continue with that policy and with that positioning. I think for the last two to three years, that ratio did not go below 60% every quarter, and this will continue. Thank you. Thank you. Thank you. Our next question is from Mehmet Gers from Osmanli Portfolio.
What are terms of royalty payments to Yıldız Holding for the use of Ülker Brand, which for some reason belongs to the parent company? We do not disclose this number. This is not a—and this is a—I mean, this is based on a relationship on every business. There is a holder of the brand. There are companies that are using that brand to operate, to make their operations. We do not own the brand. We are operating on that brand, and there is a company that holds that brand. It is the same everywhere in the world, and there is a royalty relationship between these companies. Naturally, Yıldız Holding holds the Ülker Brand, and we are operating under Ülker Brand. There is definitely a royalty relationship or a transaction between these two, but we do not disclose any numbers regarding on that.
I can assure you that the number is no different than any number that is—I mean, that is an example in other companies in the world. Thank you. Our next question is from Gustavo Campus from Jefferies. Your line is now open. Please go ahead. Hello. Yes. Thank you. Thank you very much for the presentation. I have a few questions here. Firstly, I’m trying to understand a little bit more. It seems like your international EBITDA was quite mixed when you break it up by regions. It seems like Central Asia, like Kazakhstan, was a bit weaker there, while in the Middle East, it was a little bit better. Could you please explain a little bit on what’s happening on the underlying backdrop to justify this?
I’m also trying to understand for your exports, it seems like there was significant recovery in EBITDA in the third quarter when you look at it year-over-year growth. Was this only due to higher volumes that were allocated to being exported, or was there actual improvement in the underlying pricing? That would be my first couple of questions here. Thank you. Thank you. Let me start with your last question. Yes, we achieved a good turnaround in Q3 in our international business. A recovery in demand in Q3, our manifold volumes grew by a very strong 15% year-over-year. Turkey export volumes also returned to a positive growth of 2.8%. This volume recovery also translated directly into a top-line growth with net sales increasing 41% in Turkey exports and 14% in Middle East, North Africa, and Central Asia year-over-year.
There is also a sharp improvement in profitability compared to Q2 2025. We are actively and successfully managing the cost and pricing environment, and international segment EBITDA margin also recovered from Q2 to Q3. When we come to Central Asia numbers on a specific basis, yes, on a year-to-date basis, there is a sales decline of 16.5% on a year-to-date basis. In Q3, there is also a very good recovery in Q3 on our volume, delivering 7.6% volume growth versus prior year. Our strategies shifted from margin protection to aggressively securing top-line growth. We achieved a 7.6% year-over-year increase in sales volume, and this also reflected to our margin reaching 30.5%. Hope that helps. Let me know if you have any other questions. Yeah. No, thank you for that. I was just trying to understand, did you have better pricing in your exports?
Was there any pricing recovery, or was it just higher volumes that were exported? It’s mainly the volume increase that impacted the numbers. Understood. In Central Asia, is it correct to assume that backdrop in Kazakhstan remained somewhat weak, and that’s what explains the weakness in your Central Asia segment? Yes, mainly Kazakhstan. Yes. Okay. Understood. Thank you. I’m also trying to understand a little bit about your working capital. I think we covered inventories, but on your receivables, it seems like your receivable days, they increased significantly, not only in second quarter and third quarter due to seasonality, but when I compare it to previous years, it also looks like we are at highs, multi-year highs, if I’m not mistaken here. Do you have any perspective on whether your receivables position will start improving moving forward? Do you have any targets?
I’m trying to understand what is driving the significant increase in your receivables position. Thank you. Thank you for the question. I believe that the increase in receivables is mainly a temporary fluctuation directly linked to a high volume of sales activity with our primary distribution companies during the third quarter. There is no collection issue at all. I can assure you that. The pattern is, I mean, the seasonality and pattern is consistent with our business cycle. The balance was higher at the end of Q1, decreased in Q2 following collection, and now has risen again in Q3 after post-Q3 sales. We expect the receivable balance to normalize, to stabilize in the fourth quarter as collections for these Q3s will come through in Q4 and will be realized. We do not disclose any, I mean, DSO target number or a working capital number.
Our objective here is always to optimize it. Understood. So my understanding here is that it was mainly due to the strong top-line and EBITDA growth, and this is also partially seasonal, and you expect in 2026, do you expect any normalization compared to current levels, or it may be too soon to tell? Yeah. No, we expect the normalization starting in Q4 2025 and then continue the momentum in 2026. Understood. Thank you. Yeah. Yeah. Very, very helpful. Thank you. Last couple of questions here. Could you please confirm you repaid the 2025 remaining outstanding bond amount with cash in your balance? And do you expect to raise any debt to offset this decrease in your cash balance for this? Let me answer your question in two phases.
The first one is, yes, we paid the remaining outstanding euro bond balance as cash by the end of October from our cash balance. The second one is we raised debt in order to refinance our current outstanding loan, which was going to mature in 2026 April. We kind of early refinanced it, but it was a three-year syndication loan. Now we refinanced it with a five-year bullet structure. It is also completed, and the loan with EBRD part is also completed. To your both questions, yes and yes. Understood. What was the rate that you are paying for this new syndicated loan? If you would like to know. Of course, much lower than the prior syndication. You should be able to see some more numbers when we complete or announce our Q4 numbers, annual numbers.
Much lower rates than we had in prior syndication and very favorable rates. Understood. Thank you. You still have roughly, I think, $550 million worth of short-term debt. If I exclude the bond and I exclude these EBRD syndicated loans that you refinance, you still have roughly $550 million worth of short-term debt, rough estimation here. How are you planning to refinance those? We do not have a short-term debt. The euro bond was refinanced last year in July 2024. This debt had a seven-year maturity. $550 million euro bond was refinanced in July 2024 with seven-year maturity, which matures in 2031. The current syndication, which was going to mature in April 2026, is also refinanced by the end of October with a five-year bullet structure. We are going to pay it in 2030, in five years.
All of them will be transferred to long-term when we issue our Q4. Most of them will be transferred to long-term when we share our full-year numbers. $250 million euro bond is also repaid by the end of October this year with our cash. All the loans that are outstanding right now have a long-term maturity, 2031, 2030. Okay. Yeah. Thank you for that. I just see, for example, you still have roughly $350 million of short-term letter of credits, if I’m not mistaken. Do you plan to continue to roll over this balance, or are you planning to refinance this in some other way? Because this report is as of September year-to-date, you do not see that it is closed. The closed outstanding euro bond that was coming from 2020, which was going to mature this October 2025, is already paid.
This report states September year-to-date. I tell you that by the end of October 2025, all the outstanding EUR bond debt from the year 2020 is already paid with cash. You should be able to see that by the end of December when we issue our full-year numbers, I mean, beginning of 2026. It is already paid. Two of the refinances are already done, and their maturity is 2030 and 2031. All of them are long-term. The short-term you see right now is already paid with cash by the end of October 2025. The reason why you do not see it is because you have a report stating the situation by the end of September 30, 2025. I hope it makes sense. Yes, it does. Yeah. All right. Thank you very much. Thank you. Thank you. Our next question is from Evgenia Bistrova from Barclays.
Your line is now open. Please go ahead. Oh, thank you. Hi. Thank you very much for the presentation. I have several questions. First of all, on your working capital, do you expect the same inventories inflow in the first half of 2026 as it happened this year? My second question is regarding the remaining IFC loan maturing in 2026. What is your strategy to address that? Finally, I guess it is also kind of follow-up to a question by my previous colleague. You refinance, obviously, most of your short-term debt, extended the maturity profile. What would be your strategy going forward? Are you expecting any M&As in the pipeline? Finally, I guess to clarify the previous question, I agree that you do have letters of credit debt on your balance sheet, which was considered to be short-term.
It is not part of previous euro bond or any syndication loans. It was separate as a short-term debt. At least at the end of H1, it was around $350 million. I guess the question was, how are you planning to address that? We do see that on the balance sheet, even at the end of September. If we exclude euro bonds and other bank loans that were extended, there would still be part of letters of credit on your balance sheet, it seems. Hope it clarifies. Thank you. Thank you for your questions. Let me start. I’ll kind of note them one by one. If I miss something, please remind me. Let me start with IFC loan, which is going to mature in April 2026. We have a great progress on that.
Hopefully, you should be hearing the news and updates with IFC very soon. I can assure you that with five-year bullets that we closed with our commercial banks, which is the first time since 2020 in the Turkish private sector, we had a lot of demand. It is successfully completed with EBRD. It is successfully completed with commercial banks. You will see the updates soon with IFC as well. I can tell you that the progresses are all on the right track and progressing in the right direction. That is one. Regarding the inventory, as I have also shared in the prior quarters, we do not have an exact working capital number or target because, I mean, depending on the conditions, depending on the changing environment, volatilities, and so on, our target for working capital is optimizing the working capital. Okay?
Some things might change, I mean, in order to reach this number of DII or this number of DSO. What I can tell you is that this focus on optimization of our working capital will continue throughout 2026 as well. We’ll make sure that we close at, we will have the optimized inventory and cocoa levels in 2026 and throughout 2025 as well. We’ll continue to focus on that. That’s all I can share. We expect, as I have also shared in the prior questions, that we expect the normalization throughout 2025 and 2026 as well. This was inventory and working capital. M&A, yes. Let me share with you also. Yes. We have also closed two very important financings, very, very successfully last year, euro bonds with seven-year maturity, very recently in October, five-year bullet with commercial banks.
All of them are long-term right now. There is not a, I mean, M&A plan or pipeline that I can share or I can make public with you right now. What I can tell you is our objective and our mission is to have Ulker’s growth and growth ambition will continue and to make Ulker’s, to strengthen Ulker’s global presence in the markets that we operate, will continue. We will see. That is all I can share with you right now. Regarding the LCs, the LCs are used in cocoa procurement. The short-term debt number you see is mainly LCs. LCs are used to procure cocoa, and it will be based on our own resources. We generate adequate operating cash to pay our LCs.
They are very important, one of the very important tools, first to mitigate our risks and second to optimize our working capital and to manage cash. I think LCs, especially for our business, where there is a very long cocoa cycle from end to end, is very much needed. I believe that we have done a great job here by increasing our LC limits with our very important finance partners. This definitely contributes to our business on many perspectives, very, very positively. Hope that helps. Yes. Thank you very much. Very helpful. Thank you. Thank you. Just a reminder, if you’d like to ask a question, it starts on your phone. That is star two. If you’re connected from the web, you can send a text or a voice question. We’ll just give it a few more moments. Okay.
It looks like Gustavo from Jefferies has a follow-up. Your line is now open. Please go ahead. Hi. Yes. Thank you very much. Yeah. Very quick follow-up here. How does your average realized cost for cocoa compare in 2024 compares to 2025? Can you give us some high-level idea of how much higher were your cocoa costs incurred from one year to the other? That would be my last question. Thank you. Thank you for your question, but we do not disclose these details, unfortunately. No worries. No worries. Okay. Thank you. Thank you very much. Thank you. We would like to thank everyone for the participation today. I will now hand it back to the Ulker team for the closing remarks. Thank you for your attendance and for your great questions today. If you have any further questions, please reach out to me or my team.
I believe that we delivered great results in Q3, and I believe that this momentum will continue in Q4, and we will meet our guidance. Thank you all, and have a great day or evening. That concludes the call for today. Thank you, and have a nice day.
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